On 19th July, 2018, the director of Policy Research in Macroeconomics (PRIME), Ann Pettifor, received the following from Professor Antonia Grunenberg of the Heinrich Boll Foundation, Bremen, Germany.

Dear Mrs. Pettifor,

it is my great pleasure to inform you in behalf of the international jury of the „Hannah Arendt Prize for Political Thinking“ that you have been unanimously selected to be the winner of the prize in 2018.

Die date of the ceremony is December 7, 2018.

The jury pointed out that you, a distinguished scholar, have had the courage to touch a complex topic that keeps influencing European and world affairs as well as the life of people all over the globe: the domination of the political realm by the dynamics of financial speculation…

For policymakers, the importance of private debt was the key take home from the financial crisis. Private debt is also a central theme in the Bank of England’s latest commentary around financial stability, with particular emphasis on the position in China and the US.

But there is a sense of this being only a partial account, with only very limited attention to the more generalised inflation of debt across a very large number of countries.

The world’s financial markets are hurtling towards a new phase of crises ranging from currency to balance of payments to sovereign debt to banking crises. The monetary tightening policies of the United States Federal Reserve and the European Central Bank will only precipitate crises in emerging market as well as peripheral eurozone economies, which will have global repercussions.

Much of the debate over Brexit focuses on narrowly on trade in goods. In that debate one finds relatively little discussion of the performance of the EU internal market with regard to commodity trade (“goods”). The typical argument for the British government negotiating a post-Brexit agreement presumes that EU internal market rules facilitate robust trade outcomes, and that operating outside of it would undermine goods trade. But has the EU internal market in fact facilitated trade among members? How should that be assessed?

Ten years ago the bursting of private debt ‘bubbles’ – most obviously in the US, UK and on the periphery of the EU – woke policymakers to the importance of balance sheet dynamics. Today, commentary by international organisations has ongoing rises in private debt as a key risk to global outcomes.

Severe as it has been for the welfare of the British people, eight years of so-called austerity under three Conservative governments are but the most recent manifestation of Tory assaults on public services. Since Margaret Thatcher became prime minister almost forty years ago, contracting the public sector has been a constant theme across Tory governments.

Given the catastrophic nature of both the 2007-9 crisis, and the many, and increasingly frequent crises that preceded it- society demands to know why economists have not “discovered how the economy really works”. We believe, perhaps vainly, that with a better understanding of the ‘tectonic plates’ that underpin the economy – we may, as a society, be able to prepare for a collapse. We might be able to protect ourselves, our families and firms from economic failure, job losses, collapses in living standards, housing insecurity and the impact of these failures on social life: divorce, depression and in some cases, suicide. Not to mention the disastrous politicalimpact of economic failure.

The biggest danger facing the British economy is this: at their meeting in May the Monetary Policy Committee of the Bank of England is very likely to raise rates – despite a warning from the governor - because of the ongoing fear of inflation. Raising Bank of England rates at this point of fragility, would be like deliberately and repeatedly pointing a sharp dagger at a bubble of household, corporate and financial debt.

In her new short book, Rachel Reeves reflects that the economic winners of globalisation “are asset rich elites and the metropolitan professional class of creative, media, knowledge and finance workers, and opinion formers.” Her major concern is for Britain’s “old established working class, many of whom are now excluded from high-skilled sectors”.

“Purposeful and dignified work defines what the Labour Party stands for, whilst good wages are the principal means of distributing the rewards of economic prosperity,” she writes.

The policy prescriptions of the 5 Star Movement can be found in two main documents, published in 2012 and 2013. The most important is that of 27 December 2012, which has been posted on the website of the leader of the Movement, Mr. Grillo and thus can be conceived as the official programme of the Movement.

Two basic remarks are in order. First, the class dimension of political decisions are ignored; second the restructuring of Italian capitalism in the years of the crisis are not taken into consideration.

The British people are calling out for progressive leadership. Labour could lead the nation out of the chaos created by UKIP and the far Right of the Tory party. But only if Labour’s Lexiters face up to the risks they are taking with both their own party, and the nation’s future.

On 5th January 2018, Professor John Weeks gave this year's David Gordon Memorial Lectureat the meeting of the American Economic Association in Philadelphia, USA. It was hosted by the Union for Radical Political Economics, and we are pleased to publish the text of the lecture, below.

Everyone – from the government, to housing charities, to housebuilders – has bought into the conventional wisdom that the dysfunction that racks our housing market is a matter of demand and supply. We disagree.

Over the past decade in advanced western economies, the rate of improvement in prosperity has ground to the lowest point of the post-war period.

It is argued in this article that productivity has been the result of aggregate demand rather than supply conditions. And that the strength of demand follows global monetary conditions that are the result of deliberate policy interventions.

The goal of economists and their profession is to promote the general welfare of the community. Sound and active fiscal and monetary policies are essential for promoting general welfare and stability – economic, environmental, and social - through investment, full employment, and broadly based economic activity.

A sound and active fiscal policy:

1. Does not seek a continuously balanced overall public budget

2. Compensates for inadequate or excessive private sector demand by a countercyclical management of current expenditure to maintain the economy near full potential

3. Expands the role of automatic stabilizers including support for the unemployed and a counter-cyclical tax structure

4. Incorporates public investment to increase the potential growth rate and "crowd in" private investment in areas of priority

5. Addresses the challenges of climate change and environmental protection, in particular the need to prepare for the post-carbon society

Fiscal consolidation does not ‘slash’ the debt, but contributes to it. Prof. Chick and Pettifor examine a century’s worth of macroeconomic evidence to argue that, contrary to conventional wisdom, we need to ‘spend away the debt’.

PRIME provides readers with regular short briefings on newly available data concerning the UK, European or international economy. These updates cover issues such as GDP, employment, debt and credit, and inflation.

We aim to focus on developments that are significant from a macroeconomic perspective.

In this revised edition, Geoff Tily argues that the economics profession has distorted and betrayed Keynes's legacy. In virtually all interpretations – especially that taught to students – Keynes is portrayed as concerned only with government expenditure as a means to cure economic crisis. Yet his prescription concerned monetary not fiscal policy.